Business Synergy

Operational excellence expands JDSU’s reach to new customers.

by David Baum, August 2009

As a leading provider of technology products to the telecommunications, medical, aerospace, and defense industries, JDSU sometimes turns its innovative spirit inward in order to grow its impressive customer base. Following a spectacular rise and precipitous fall during the dot-com era, the Milpitas, California-based company shortened its name from JDS Uniphase, revamped its corporate image, and steadily acquired companies to bolster its portfolio. Its purchase of Acterna in 2005 opened up a whole new business segment, doubled JDSU’s potential market base, and diversified its customer base.

JDSU acquired seven more companies in the ensuing two and a half years. Today, the maker of components for fiber optic communications networks continues to branch into new fields and put a stop to years of losses with rising sales. It is the leading provider of communications test and measurement solutions and optical products for telecommunications service providers, cable operators, and network equipment manufacturers. JDSU is also a leading provider of innovative optical solutions for medical/environmental instrumentation, semiconductor processing, displays, brand authentication, aerospace and defense, and decorative applications. Its 2007 revenue of US$1.4 billion was almost double the 2005 total. During 2008—when much of the tech industry went into a tailspin—JDSU posted an additional 9.5 percent gain to bring its fiscal year total to more than US$1.5 billion.

JDSU’s ascent has created exciting opportunities for the company’s IT department, fostering changes that have rippled across the entire organization. When CIO Marti Menacho joined the company in January 2008, JDSU depended on a diverse IT environment that sprang from the consolidation of 18 companies. The fragile and inflexible state of its information systems was preventing JDSU from meeting some of its business requirements.

“JDSU had lost the ability to scale its information systems and to efficiently support the requirements and processes needed by different business units,” says Menacho, CIO and senior vice president at JDSU. “Our information systems had been architected for homogeneous product lines and did not support our current portfolio or operating model.”

When JDSU enlisted Oracle On Demand in 2002 to deploy and support Oracle E-Business Suite, the company gained access to a powerful portfolio of solutions and services. Over time, however, a complex set of business conditions made it difficult to upgrade these information systems. As a result, JDSU was not able to take full advantage of Oracle’s capabilities and resources. JDSU needed more than an application upgrade. It needed a complete IT makeover.

“Over the six years that Oracle was in place at JDSU, our company went from a single line of business to a diversified technology portfolio company,” explains Menacho. “Like many companies, our information systems were developed over time, resulting in more than 1,000 customizations. This made it difficult to move our application platform forward.”

Addressing the Fundamentals The company’s move to a standard Oracle On Demand environment allowed Menacho to not only leverage Oracle’s latest software functionality but also take advantage of its application experts and DBA resources. One word came up again and again, she says: expertise. “It made sense to leverage Oracle’s competency at running its own applications.”

Phil Fersht, research director of the enterprise strategies team at AMR Research, says that outsourcing the responsibility for enterprise software is becoming more and more common as the role of today’s CIO changes from a technologist to more of a business leader. Often this involves focusing on applications and strategies that critically affect the business, emphasizing both internal and external investments. “As hardware and software infrastructure gets more complex, many CIOs are deciding to outsource their critical information systems,” he says.